Tax Credit Briefing discussion

mrsspendalot

iceage3 wrote: »

i have just found out about this does anyone know the rules of this,as i am part of a couple but my other half looks after the kids but i work more than 30 hrs a week ?
so do i still get working tax credit

You'll be fine as you are working more than 24hrs

paul1234567

For the first time, my income is too high for child tax credits. Not sure if that's because of a government change or something else but basically I was wondering how to lower my income (to less than £41,300). I know I am able to pay more pension but I also give a lot to charity. Is charitable giving counted? In other words, if I earn £50,000, pay £5000 into pension and give £3,700 to charity, will that entitle me to the child tax credit?

All help appreciated.

brummiebabe

I've just spoken to the Tax Credits Helpline...if you earnt over £40000 in 2010/2011 then you will not be entitled as of April 2011!! I was told there are very rare exceptions to this....Although a letter has gone out to people saying it's £42000 and over, that was an error & everyone'll get a letter confirming it's £40000. The £42000 relates to Child Benefit!!

brummiebabe

paul1234567 wrote: »

For the first time, my income is too high for child tax credits. Not sure if that's because of a government change or something else but basically I was wondering how to lower my income (to less than £41,300). I know I am able to pay more pension but I also give a lot to charity. Is charitable giving counted? In other words, if I earn £50,000, pay £5000 into pension and give £3,700 to charity, will that entitle me to the child tax credit?

All help appreciated.

I don't think they take your pension contributions into account...it's your gross income!

KevinG

brummiebabe wrote: »

I don't think they take your pension contributions into account...it's your gross income!

No it's not, it's your taxable income, pension payments are deducted, as is the grossed-up value of Gift Aid donations to charity (though they don't make this at all obvious on the standard claim form) which is jolly handy in my case. You can substantially increase your Tax Credits by giving money to charity.

bumpybecky

charity donations might also include money given to schools for tickets and brownies/guides/cub/scout etc subs, anything where you've filled in a gift aid form

anguk

I don't understand, why give money to charity just so you can bump up your tax credits? Why not keep the money instead for your income then you wouldn't need the tax credits, what would you gain by giving away your own money just to be subsidised instead by the tax credits? I'm confused.

melly1980

KevinG wrote: »

No it's not, it's your taxable income, pension payments are deducted, as is the grossed-up value of Gift Aid donations to charity (though they don't make this at all obvious on the standard claim form) which is jolly handy in my case. You can substantially increase your Tax Credits by giving money to charity.

not so

they can argue that you have deliberately reduced your own income and not pay you the tax credits.

KevinG

melly1980 wrote: »

not so

they can argue that you have deliberately reduced your own income and not pay you the tax credits.

But it IS so, if they do try to make that argument it's a totally separate issue. In my case the charitable giving is well established so they could not make that argument anyway. Are you aware of any real-life examples of this happening?

KevinG

anguk wrote: »

I don't understand, why give money to charity just so you can bump up your tax credits? Why not keep the money instead for your income then you wouldn't need the tax credits, what would you gain by giving away your own money just to be subsidised instead by the tax credits? I'm confused.

I wasn't seriously suggesting that you did it JUST for that reason, merely pointing out that you can deduct gift aid payments from your taxable income for Tax Credits purposes (there is a separate working sheet for this). I would argue the opposite - why NOT give money to charity - it's a good thing.